What you might not know about jewellery insurance

That sparkler on your left hand can carry a lot of financial as well as sentimental value. What would you do if you lost it?

I lost my diamond engagement ring.

I am one of those strange people who take all their jewellery off as soon as they get home. It’s a habit I have developed because I don’t like anything on my fingers, especially if I’m doing a lot of typing or cleaning up at home.

So on this particular Friday, I came home and slipped my wedding band and engagement ring into the drawer where I also keep my wallet and keys. The next day, as I was leaving for a brunch date, I reached for my wallet, keys and rings, but found only one ring. My wedding band was sitting right where I had left it but my engagement ring was gone!

How could this be? The only place I had gone Friday night was out to the dumpster with my keys to throw out the trash. Could it have slipped onto one of my keys and fallen outside of the house? Did I throw it into the dumpster? Did it fall behind a piece of furniture? Did someone see it in the alleyway and pick it up? My mind was racing with crazy scenarios and possibilities. The weekend was officially shot and I spent every waking moment looking for and stressing over my missing ring.

The worst part?

It wasn’t sufficiently insured.

Is lost jewellery covered by insurance?

We have home insurance, but most home insurance policies cover jewellery, watches and furs up to a combined limit of only $6,000, subject to the policy deductible. My ring was worth more than that. It had been covered separately (“scheduled”) on the insurance policy on our former home, but I had failed to add the extra coverage to the policy on my new home. The guilt of not doing so was what ate at me the most.

By Sunday, I was close to buying a hazmat suit and medical mask and going dumpster diving in the alleyway for my missing ring. But before I did so, I went upstairs to sort through my laundry and what did I find? My engagement ring in the pocket of a pair of jean shorts! I must have been distracted by a phone call when I was in the midst of taking off my rings and slipped one into my pocket when I ran to answer my cell. Hallelujah!

So as you can imagine, I learned my lesson and wasted no time in putting my ring on my insurance policy. Adding a jewellery schedule to your homeowner’s or tenant’s insurance policy has several benefits, says Brian Waddell, president of Waddell Insurance Brokers Limited in Mississauga, Ont. They include:

• Coverage if a stone falls out of your ring. According to Waddell, this is the most common claim.
• No deductible applies (versus the $1,000 deductible commonly applied to claims for unscheduled property — you pay the first $1,000 of a claim, and the insurance company pays the rest up to your coverage limit)

How much does it cost to add jewellery to your home insurance policy?

The cost of adding scheduled jewellery to your home insurance typically ranges from 1½ to 2% of its appraised value. (Because diamond jewellery tends to appreciate over time as diamond prices rise, insurance companies commonly require a new appraisal every five years.) So, depending on your insurer’s rates, your $5,000 engagement ring could cost between $75 and $100 per year to insure. It’s up to you to weigh the expense against the protection it buys.

What about your other prized possessions?

• Electronics. Hi-tech gadgets such as computer hardware and software and sound equipment are included under your home insurance policy up to the limit of your contents, but unless you purchase replacement cost coverage for your contents, they – like the rest of the contents of your home — are covered only for their actual, depreciated value, rather than what it would cost you to replace them.
• Cameras. Like computer gear, photographic equipment is covered up to the limits of your contents insurance, for their depreciated value unless you have replacement cost coverage, says Waddell. Scheduling your high-end camera and lenses protects them against breakage as well, with no deductible.

I know that being a newlywed can be very overwhelming and jewellery insurance is probably the last thing you’re thinking of. It wasn’t until I lost my ring that I realized how important it actually can be.

Lisa Ng is the Editor-in-Chief of This Beautiful Day, a lifestyle blog for smart women. Follow her online @helloLisaNg.